Cable rates' endless rise

Stuck

Lack of competition means Jay Young can't switch when his cable company raises rates.Photograph by Brian R. Tolbert

Jay Young, 73, had never written a letter to the editor of his newspaper. But he was driven to in December, when Blue Ridge
Communications informed him that his cable rates would increase almost 6 percent, he says. It was roughly the same jump he
has seen in his bills every year since 2003.

"It's crazy," says Young, who lives on a fixed income with his wife, Sylvia, near Manheim, Pa. Cable rates would stabilize
if there were more competition, he believes. But like most U.S. households, the Youngs have little choice in the matter. "You're
stuck because they are the only game in town," he says.

Rates for expanded basic tiers such as the one the Youngs subscribe to have spiked 122 percent since 1995, the Federal Communications
Commission noted recently. That's three times the rate of inflation.

The availability of satellite TV has had a negligible effect on driving down pay-TV prices, according to the FCC. But in the
few communities that are served by a second cable operator, rates were consistently some 10 percent lower.

Verizon and AT&T have begun offering TV service in some areas, but it's not yet an option for most homes.

More transparency among cable providers could also lead to lower prices and better service. Cable companies have blamed rate
increases on the cost of carrying popular networks and the price of upgrading infrastructure. Consumers Union, the nonprofit
publisher of Consumer Reports, and other advocacy groups believe Congress should require cable companies to disclose the cost of individual channels and
equipment and explain price disparities from one community to the next.

Consumers Union has long supported à la carte pricing, which would allow customers to choose their own assortment of cable-TV
channels and pay only for what they want. Some cable providers in Canada are already offering à la carte pricing for certain
channels.

The latest findings by the FCC underscore the need for a hard look at cable rates. In the absence of competition among providers,
the best that policy makers can do is press cable companies to justify their pricing and to let consumers choose their channels.

What you can do

Check your cable company's Web site to see whether there's a less expensive tier for you; packages change.

Ask your provider whether it offers a no-frills tier with just 20 or so channels. Most do, for about $20 per month.